By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks slipped Thursday, pulled
down alongside U.S. equities after a Federal Reserve official said
he foresees policy makers issuing an interest-rate increase sooner
than later.
The Stoxx Europe 600 index lost 1 point to end at 341.86, swept
lower after St. Louis Fed President James Bullard said a rate hike
by the Fed could take place at the end of the first quarter of
2015. He expects a rise in inflation above the 2% level next year,
which will spur a debate about the path of interest rates at the
Fed, said Bullard during an appearance on the Fox Business
Network.
While Bullard said in May he sees a rate increase coming late in
the first quarter of next year, bets currently on the fed funds
futures market indicate a rate hike will take place in the middle
of 2015. On Wall Street intraday, the S&P 500 index (SPX) was
down 0.4% and the Dow industrials (DJI) were off session lows after
losing more than 100 points.
European stocks had been on track for its first win in five
sessions before the turnaround. The index on Wednesday dropped
1.1%, the steepest decline since mid-April according to FactSet
data, as equities keyed off a slide in U.S. equities.
Bank stocks fell, though shares of Barclays PLC had already been
suffering after New York Attorney General Eric Schneiderman
launched a civil lawsuit against the bank on Wednesday. Barclays
shares dropped 6.5% to a 19-month low.
The lawsuit alleges Barclays dramatically increased the market
share of its dark pool through a series of false statements to
clients and investors about how, and for whose benefit, the bank
operates its dark pool. Dark pools, private trading platforms that
allow block trades, are designed to let firms make anonymous trades
without disclosing their hands.
In July 2012, the Bank of England pushed out Barclays's
then-chief executive Bob Diamond a month after the lender was fined
for rigging the Libor benchmark interest rate.
"Other European banks operating dark pools are likely to also
face charges in the future," said Credit Suisse analyst Amit Goel
in a note Thursday, adding that UBS AG may face $187 million in
litigation costs tied to its U.S. dark-pool operation. Shares of
UBS (UBS) fell 3%.
Meanwhile, Standard Chartered PLC shares dropped 4.3% after the
bank, which focus on emerging markets, warned about its first half
operating profit.
But heading up advancers in Thursday's session was London Stock
Exchange , rising 6.1% after the exchange operator said it's
acquiring U.S.-based asset manager Frank Russell Co. for $2.7
billion. LSE topped winners on the U.K.'s FTSE 100 index , though
that index pared gains for a finish of less than 2 points higher at
6,735.12.
Fresenius Medical Care AG popped up 2.6%, after a ratings
upgrade at Credit Suisse to outperform from neutral on
Thursday.
Among country indexes, France's CAC 40 index fell 0.5% to
4,439.63, and Germany's DAX 30 equity index lost 0.6% to
9,804.90.
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